Michael Ferro’s mission to save journalism — and his reputation as a media dealmaker — was tarnished after a thwarted attempt to buy the Chicago Sun-Times and a reported bid for US Weekly that went nowhere.
Now, Ferro is back at it, snapping up the New York Daily News and adding the nation’s largest media market to his group of dailies that also includes the Los Angeles Times, the Chicago Tribune and the Baltimore Sun. His newspaper company, Tronc Inc., agreed to pay $1 — the price of one issue on the newsstand — and assume operational and pension liabilities, which two people familiar with the deal value at more than $100 million.
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Ferro is betting he can reimagine the 98-year-old tabloid under his unique vision for the future of news. The software engineer, whose company once posted a want ad for an employee to assist “news content-harvesting robots,” has promised to unveil a “content monetization engine” that would unleash newspapers’ true potential as a “rock star business.”
It’s been tough sledding so far. Newspaper advertising revenue fell 16% in the first six months of this year to $283.5 million, and the 0.3% gain in circulation wasn’t enough to make up for it. Digital ad sales also dropped. Tronc’s largest newspaper, the L.A. Times, went through a management shakeup last month, ousting four top editors.
Ferro gets larger national advertising opportunities by acquiring the Daily News, making him a newspaper owner in New York and Los Angeles, the two top media markets. Tronc now also holds more newspapers in the Northeast, including the Hartford Courant in Connecticut and the Morning Call in Allentown, Pennsylvania, which may help save on printing costs.
The decline in print advertising — and newspapers’ struggles to compete against Google and Facebook Inc. for online ads — has led Tronc and rivals including Hearst Corp. and Gannett Co. to buy more papers to gain scale and cut costs. Last year in the U.S., 50 daily newspapers changed hands in 28 deals, according to newspaper merger-and-acquisition firm Dirks, Van Essen & Murray. The deals were driven largely by families or small newspaper groups getting out of the business.